In Cairo, Egyptian mediators were working around the clock with Israeli and Hamas negotiators trying to hammer out an agreement on the release of captured Israeli soldier Sgt. Gilad Shalit for hundreds of Palestinian terrorists; on the West Bank, Palestinian terrorists shot dead two unsuspecting Israeli policemen. The deadly terror attack illustrates the dangers of setting free hundreds of hardened terrorists many of whom can be expected to strike again. On the other hand, Israel must cope with its historic pledge never to leave a soldier in captivity.

The West Bank near the Israeli settlement of Masu'a - 8:30 PM: Two Israeli policemen in a patrol car spot a vehicle apparently having trouble along the side of the road. The two policemen drive up to check it out, perhaps to offer their help. Palestinian terrorists at close range suddenly draw weapons and shot the two policemen and then drive off. A short time later, paramedics arrive at the scene to find the police car overturned with the two policemen inside. They try to resuscitate the two policemen but to no avail. An anonymous phone caller tells a news agency that the 'Imad Mugniyah Group' is responsible for the attack. That is the picture that has emerged so far. It was the first road side shooting in some time. The IDF and the Shabak security service, with mounting cooperation with the Palestinian security service have succeeded in suppressing terrorism on the West Bank. But it illustrates the danger of releasing hundreds of terrorists while intensive negotiations are being conducted around the clock in Cairo on a new prisoner exchange for captured Israeli soldier Sgt. Gilad Shalit.

In recent exchanges, up to 70% of Palestinian terrorists released in the past have returned to their old ways. This could spark a new wave of terrorism from the West Bank that might kill and wound dozens of Israelis

The long drawn-out negotiations between Israel and Hamas via Egypt may now be drawing to a conclusion. Shabak security chief Yuval Diskin and special Ofer Dekel have delayed their return to Israel therefore Monday's the special cabinet meeting has been postponed. Prime Minister Ehud Olmert is to present the facts and figures about the latest Hamas demands for the release of Gilad Shalit who was captured nearly 1000 days ago in a cross- border raid from Gaza. Outside the prime minister's residence in Jerusalem, Gilad's parents and family members have set up a protest tent demanding the government return their son. For over a week now, hundreds of Israelis from around the country have been showing up in solidarity. They support releasing the terrorists to get Gilad back. The highly emotional issue has dominated the headlines amid speculation over whether or not Prime Minister Ehud Olmert will keep his pledge to achieve Shalit's freedom before leaving office shortly.

Across the street, another protest camp has been set up. There, the families of Israelis murdered by terrorists protest the release of the Palestinian killers. They say although Shalit must be brought home, this must not be at the cost of setting free hundreds of terrorists who have 'blood on their hands' and will return to killing more Israelis in the future. In their view, it is not only a question of revenge but of justice and national security. Moreover, the heads of the Shabak security service and the Mossad intelligence agency have warned that releasing hundreds of Palestinian terrorists will pose a major security threat for Israel in the future. In recent exchanges, up to 70% of Palestinian terrorists released in the past have returned to their old ways. This could spark a new wave of terrorism from the West Bank that might kill and wound dozens of Israelis. One Israeli idea is that the terrorists must be expelled to the Gaza Strip where they would not pose such a grave threat. The question is whether Hamas will agree to this. On the West Bank, Israeli security forces have succeeded in suppressing terrorism by an ongoing and relentless crackdown on terrorists in cooperation with the security forces of Palestinian President Mahmoud Abbas. On the political level, the influx of hundreds of hardened Hamas terrorists to the West Bank could weaken Abbas in his confrontation with Hamas, which expelled him from Gaza in a bloody coup nearly two years ago.

Bibi Circling Back?

Is Prime Minister designate Bibi Netanyahu now circling back at the 11th hour trying to entice Kadima into his new coalition? He has good reason to try. As it stands today, the Likud leader is building his coalition on the far right to forge a narrow majority in the 120 member Knesset. Newly elected Kadima member Nachman Shai sums up what could be Bibi's predicament: "Bibi is well aware that he will be hamstrung in the international arena when it comes to conducting a foreign policy with any leeway". Now that US President Barak Obama is leading a policy of engagement and dialogue, an Israeli government will acquire a negative image if it does not continue to pursue the two-state Palestinian solution. This policy has been voiced by Kadima's leader Tzipi Livni and downplayed by Netanyahu. The issue is at the heart of the matter being secretly discussed by Netanyahu and Livni for several days now. Livni insists on a Netanyahu commitment to the two-state solution as a condition for her joining his coalition. So far, the Likud leader has indicated that he will honor previous government commitments but he is opposed to the establishment of a Palestinian state but first the Palestinians must build up democratic and economic institutions for sustaining a Palestinian state that will live in peace with Israel. The grapevine has it that Netanyahu is so eager to get Kadima into his coalition that he is even willing to agree to a rotation of the premiership with Livni. But the ideological issue will not be an easy one to crack. Livni is adamant that Israel must at least try for the two-state solution even if prospects are not all that good. Otherwise, she contends that the international community will step in and start dictating its solution. (At Sunday's Cabinet meeting, Prime Minister Ehud Olmert declared the hit that he had actually made wide ranging proposals to Palestinian President Abbas but "unfortunately the Palestinian side was not ready to reciprocate".

The grapevine has it that Netanyahu is so eager to get Kadima into his coalition that he is even willing to agree to a rotation of the premiership with Livni

It is hard to gauge if there is any real prospect for Netanyahu's last-minute attempt for a breakthrough with Kadima. Meanwhile, the Likud has wrapped up its first coalition agreement with Avigdor Lieberman. Shas, Aguda, Bayit Yehudi and National Union are waiting in line although the Likud says the door is still open for Kadima. One Kadima source says Livni may also have an important party consideration in mind. Many of her Kadima party MKs broke away from the Likud solely because former Prime Minister Ariel Sharon led the way. Once in the Likud led coalition, Livni might be worried that in a future confrontation with Netanyahu, these MKs would again break away again - and next time leave Kadima and return to their old Likud fold. Meanwhile, Prime Minister designate Netanyahu is not wasting any time in forming his coalition, with or without Tzipi Livni.